Should My Deposit be put into Escrow?
If you have ever engaged in a real estate transaction before, you have probably heard of the word escrow and even used an escrow agent. However, if you are new to real estate, it is essential that you understand what the word escrow means and further what escrow is all about. To learn more about escrow, you should consult with an attorney. Our Orlando Real Estate Attorneys from the law office Nishad Khan P.L. have wide knowledge in the field of real estate and can offer you all of the information and guidance you require on escrows and escrow agents.
What does escrow mean?
In most real estate transactions, parties to the transaction often require a demonstration of a commitment through the payment of a deposit. Therefore, one of the common clauses with real estate contracts is the clause on deposits. While some parties are often agreeable to making the required deposit. For some, the level of trust that the opposite party will meet his or her contractual obligations is usually low. Therefore, most parties tend to be reluctant to meet the provisions regarding the deposits within the agreement.
In an effort to address the dilemma that befalls both sellers and buyers on either party’s seriousness to meet his or her contractual obligations, it is recommended that a deposit be paid by the buyer and that such deposit be held by an escrow agent in an escrow account. The salient rule about escrow accounts is that they are held by a third party and not the seller or the buyer. The third-party can be a real estate brokerage, a title agent or an attorney. With the competence and professionalism that our Orlando Real Estate Lawyer presents, you can trust that your deposit is held by an attorney who is ready to stick to the fiduciary duty owed to the parties throughout the transaction. Every aspect of real estate transactions has its legal framework, and the same applies to escrows.
With the help of our Real Estate Attorney in Orlando, you will be able to learn the following:
Timeframe to deposit the required amount of money into the escrow account
In a scenario where the payment of an escrow deposit is required, the contract will direct the buyer to deposit the moneys with a mutually designated third-party escrow agent. The contract will also provide the amount of the deposit that will need to be paid into escrow and the specific timeframe for when such deposit will need to be paid into escrow. In this circumstance, it is important for the buyer to pay attention to the specific timeframe for when the deposit will need to be paid and to ensure that he or she adheres to that specific timeframe. Paying attention to whether the timeframe consists of business days versus calendar days is very important. If the contract calls for the deposit to be paid into escrow within a certain amount of business days, the contract should also include a definition of what constitutes a “business day”. For example, does the term “business days” include holidays? If so, would it be a federal holiday, a state holiday or a bank holiday? Getting clarification on these types of provisions will help to ensure that any moneys paid into escrow do not later become the subject of an escrow dispute. Therefore, to avoid scenarios where a deposit paid into escrow later becomes the subject of an escrow dispute, it is always advisable that you are in constant consultation with Real Estate Lawyer in Orlando from the law office of Nishad Khan P.L.
Escrow disputes and disbursements
Like in any other transaction, a dispute might arise concerning an escrow account, an example being where either party fails to meet their contractual obligations while the other party remains ready, willing and able to meet their contractual obligations. Generally, it is the contract that will act as the roadmap as to how the escrowed funds are to be handled in the event of an escrow dispute. Per the terms of the contract, some requirements may need to be met for the escrowed funds to be released from the escrow account after a dispute has been reported. For example, the contract may require the escrow agent to receive non-conflicting instructions on the disbursement of the deposit from both the buyer and seller, which will need to be in writing and signed by both parties. Our Real Estate Lawyer in Orlando FL is well aware of how to address escrow disputes. If the dispute escalates to court and the escrowed funds are deposited into the court registry, our team of competent Orlando Real Estate Attorneys can help you with your escrow dispute claim.